Our ESG objectives include the following:
- Reduce our global environmental footprint
- Maintain a socially responsible and ethically sourced supply chain
- Prioritize the health and safety of our global workforce
- Advance equity, diversity and inclusion at our company and within the community
- Develop programs and reporting for ongoing improvement
MaxLinear takes our common stewardship of the environment seriously. We believe human activities are contributing to climate change, and that we, and global society, must do our part to reduce our greenhouse gas emissions and to limit the global temperature increase to 1.5ºC as called for in the Paris Agreement. Among other things, we monitor our global environmental footprint, both directly and indirectly, and in our development efforts, our engineers are consistently focused on improving the power efficiency and thermal performance of our chips, minimizing water consumption and waste, promoting recycling of reusable materials, and providing customer satisfaction through compliance with global environmental regulations as they relate to our products and operations. We are committed to contributing to the reduction of greenhouse gas emissions, and we are currently taking measures to reduce our greenhouse gas emissions and environmental impact such as purchasing 100% renewable energy for our facilities in California and elsewhere where available, using key suppliers that focus on sustainability as described below, enhancing our offices with energy saving improvements, and transitioning away from one-time use plastics used in the office to sustainable reusable products. We are currently assessing additional measures to further reduce our emissions we plan to set formal targets for reducing emissions in 2024.
As a fabless semiconductor design company, we do not manufacture our products and, with respect to the activities we conduct directly, we believe we leave a limited environmental footprint. With respect to our indirect environmental impact, we consider and monitor the practices of our current and prospective foundry partners and suppliers in assessing environmental risks in our supply chain and in selecting key vendors. We believe that our key suppliers have made a public commitment to integrate sustainability and sensitivity to environmental impact into their manufacturing processes. For example, according to their company webistes, four of our largest manufacturing partners, Advanced Semiconductor Engineering, Intel Corporation, Taiwan Semiconductor Manufacturing, and United Microelectronics Corporation, each maintain well-developed environmental management and sustainability programs that are publicly avowed and supported by the highest levels of management within those organizations and have either set targets to reach net zero greenhouse gas emissions, or otherwise reduce such emissions, including in their manufacturing plans and processes. We aim to have a majority of manufacturing partners that are certified with ISO 14001 international standards for environmental management systems and plan to launch manufacturing partner audits in the future. We also participate in recycling of integrated circuits and boards. Additionally, our products are compliant with the Restriction of Hazardous Substances (RoHS) and Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) standards in the European Union (EU).
Greenhouse Gas (GHG) CO2 Emissions & Energy Usage
MaxLinear recognizes the importance of Greenhouse Gas (GHG) emissions and its impact to the environment across our value chain. We have evaluated and continue to analyze direct and indirect emissions from our business activities, supply chain and product lifecycle. The majority of our Scope 1 and Scope 2 GHG emissions is comprised of Purchased Electricity. We actively look for ways to use more renewable energy across locations and lower overall energy consumption. In the baseline year of calculating GHG emissions, we have also found that the largest driver of our emissions is the Scope 3 category of Purchased Good and Services as we are a fabless designer of integrated circuits. As we build our GHG emissions history, we plan to analyze opportunities to reduce our overall emissions. In addition, we aim to set long-term goals for GHG emission reduction. In the meantime, we are actively reducing our emissions by purchasing 100% renewable energy in locations where it is available, primarily for our three California locations: Irvine, Carlsbad, and San Jose.
Our GHG emissions and energy usage throughout MaxLinear locations is as follows*:
|Energy and Emissions Summary||2022
|Energy Use - Total (GWh) from Grid||12.90||9.77|
|Energy Use - Percent from Grid||100%||100%|
|Renewable Energy (GWh)||4.27||2.06|
|Percent Renewable Energy||33%||21%|
|Non-Renewable Energy (GWh)||8.62||7.71|
|Percent Non-Renewable Energy||67%||79%|
|Scope 1 (Direct) Emissions - CO2e (tonnes)||61||324|
|Scope 2 - location based (Indirect, Electricity) - CO2e (tonnes)||5,320||4,321|
|Scope 2 - market based (Indirect, Electricity) - CO2e (tonnes)||5,420||3,857|
|Scope 3 (Categories 1, 2, 3, 6, 8)** - CO2e (tonnes)||300,823||244,189|
|Category 1 - Purchased goods and services||297,935||233,097|
|Category 2 - Capital goods||0||7,614|
|Category 3 - Fuel-and energy-related activities||1,272||2,924|
|Category 6 - Business travel||1,442||259|
|Category 8 - Upstream leased assets||147||294|
|Total CO2e (tonnes) - Scope 1, Scope 2 - market based & Scope 3||306,304||248,370|
*Electricity data from the below locations, which were not significant due to the size of the facilities, was not available. These locations were not included in Scope 2 Purchased Electricity nor Energy Usage; however, they are accounted for in Scope 3 Upstream Leased Assets.
• Massachusetts, USA
• Oregon, USA
• Chennai, India
**As Scope 3 emissions are comprised of assets not owned or controlled by MaxLinear, we have compiled data for applicable categories where available. We continue to reach into our value chain to obtain additional information from our upstream and downstream counterparts. Our current Scope 3 data set consists of the below activities:
Category 1 - Purchased goods and services: Product inventory purchases; non-production related product purchases
Category 2 - Capital goods: Production photomasks
Category 3 - Fuel-and energy-related activities (not included in scope 1 or scope 2): Extraction, production, and transportation of consumed fuels and fuels consumed in electricity as well as generation of electricity that is lost in transmission and distribution
Category 6 - Business travel: Employee air travel; mileage reimbursement information between MaxLinear Carlsbad and Irvine offices
Category 8 - Upstream leased assets: Office leases utilized to estimate electricity for locations not accounted for in Scope 2 Purchased Electricity; such locations were not significant.
*** The other GHG emission factors were available only for US and Canada based locations.
**** Emission values displayed as 0 are less than 1 tonne.
Note: the GHG emissions are calculated based on the methodologies laid out in the GHG Protocol, as follows. GHG emissions were quantified per the Sustainability Accounting Standards Board (SASB) Semiconductors Standard and the ISO 14064-1:2006, Greenhouse gases - Part 1: Specification with guidance at the organization level for the quantification and reporting of greenhouse gas emissions and removals. Emissions are reported for carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3) from direct and indirect sources. The United Nations Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report (AR4) global warming potentials (GWPs) were used to convert CH4 (25)and N2O (298) emissions to CO2e. The following GWPs were used for HFCs: R-410A: 2088] ; HFC-134A: 1,430. Emission are total gross global GHGs emitted to the atmosphere before accounting for offsets, credits, or other similar mechaisms that have reduced or compensated for emissions.
Note 1: Metric Codes: Sustainability Accounting Standards Board (SASB) Semiconductors Standard TCSC Version 2018-10: TC-SC-130a.1; Global Reporting Initiative (GRI) 2016 302 Energy 302-1/11.1.2; CDP Climate Change 2022 Questionnaire C8 Energy C8.2
Note 2: Scope 2 footnote: Metric codes: SASB TC-SC110a-1, GRI 305 Emission 305-1/11.1.5, 11.1.6;CDP C6 Emissions Data C6.1, C6.2, C6.3, C6.4a, C6.5, CDP C7 Emissions Breakdown C7.1.
As noted above, we believe our products improve the quality of life for consumers around the world, mostly notably during the pandemic as we helped make possible the Internet backbone and infrastructure on which everyone relied for more than a year. On the other hand, the same infrastructure that made work-from-home and virtual parties a reality is a substantial user of our energy resources. To counter this adverse energy impact, we design our chips with specific objectives intended to reduce energy use by the end products in which they are incorporated.
The projected exponential growth of network data and data traffic generated and consumed by social media, on-demand streaming services such as Netflix and Amazon Prime, and data center and cloud-based services, the proliferation of interconnected appliances in the home, within industry, and by enterprises, frequently referred to as the “Internet of Things (IoT),” and the advent of the 4G/5G wireless mobile internet are each driving unprecedented growth in energy consumption. Our CMOS broadband, high-frequency analog and mixed-signal, digital system-on-chip (SoC) solutions have exceptional levels of functional integration that drastically reduce power consumption across a wide range of the broadband communications, wired and wireless infrastructure, and industrial and multi-market customer market applications. In the majority of these systems, overall power consumption can be ascribed to multiple transceivers in a system, each of which receives and amplifies weak data signals and conversely transmits strong data signals to other receivers while maintaining excellent signal quality. At our founding, we pioneered broadband high-frequency radio transceivers integrated with complete digital signal processing systems in CMOS on a single-die for televisions, cable data modems and video gateways – our products and technologies reduced power consumption of each transceiver function by a factor of 10 to 50. As a result, we believe that today’s worldwide annual shipment of 250 million televisions and cable data modems requires 40,000 Megawatts of less power generation annually than they would have otherwise needed in the absence of our innovations. These energy savings are equal to the total energy consumption needs of four megacities, each the size of New York. We continue to be a leader and pioneer in technology innovations that advance our ability to achieve the highest levels of integration of all analog and radio-transceiver and digital signal processing functionality on the same chip, which drastically reduces power consumption by elimination of signal transitions between multiple discrete chips and subsystems in large high-volume data bandwidth energy intensive applications. These applications include cable, copper, and fiber-optic multi-gigabit data access modems for home; in-home data distribution using WiFi, MoCA, or G.hn wired connectivity technologies; 400/800 Gbps optical transceivers that connect cloud and artificial intelligence (AI) servers to switches and routers inside hyperscale data centers; 5G massive-MIMO antenna radio transceiver arrays in wireless base-stations; and wireless and optical transport networks that haul data traffic between connecting base-stations, data centers, and end user connections. By reducing the power consumption in these systems by an estimated two to fifty times the consumption under conventional approaches, we also simplify costly thermal designs that would otherwise be environmentally harmful by requiring bulky inefficient fans and other refrigeration systems.
We believe that in order to address many of the energy resource and environmental challenges facing the world, the pace of energy-efficiency innovation must outstrip the rate of increase in energy consumption by the data intensive communications applications on which we increasingly rely and which will continue to form the backbone of our evolution as a society. We are continuing to pioneer new technology and innovation through investments intended to develop monolithic or integrated power management and high-power regulation silicon products that transform the efficiency of power provisioning in electronic systems. We believe that our continued innovation in power regulation and provisioning with “smart telemetry” will minimize idle-mode energy wastage and instead ration power in an application or system based on functional utilization versus today's mostly “Always ON” systems. We believe that our technology investments in power-regulation, power-provisioning, and power-telemetry will have a transformative beneficial impact on the energy needs of our interconnected world.
Socially Responsible and Ethically Sourced Supply Chain
We are committed to the use of a socially responsible supply chain to reduce the risk of human rights violations and the use of conflict minerals (tin, tungsten, tantalum and gold, or 3TG) from the Democratic Republic of Congo and certain adjoining countries. We are committed to respecting internationally recognized human rights under the UN Universal Declaration of Human Rights and UN Guiding Principles on Business and Human Rights. Our efforts include maintaining an anti-slavery policy, and a business partner labor standards policy which bars the use of forced or child labor and slavery and a conflict minerals policy governing the use and distribution of 3TG minerals, as well as conducting due diligence before allowing a potential supplier to become a preferred supplier. We request the return of reporting forms related to conflict minerals from our suppliers under the Responsible Minerals Initiative, or RMI, Conflict Minerals Survey. We file an annual conflict minerals report (https://investors.maxlinear.com/). Further, we seek to remove any suppliers that continue to fail to meet our business partner labor standards and conflict minerals policies after being provided the opportunity to remedy non-compliance via implementation of a corrective action plan.
Health and Safety
Our ongoing focus on workplace safety and compliance to applicable regulations has enabled us to preserve business continuity while ensuring a safe work environment. A substantial portion of our workforce has been vaccinated against COVID-19. We also comply with applicable laws and regulations regarding workplace safety and are subject to audits by entities such as the Occupational Safety and Health Administration (OSHA) in the United States. We are in the process of updating our health and safety policies.
Total Recordable Incident Rate. We track the total recordable incident rate in certain jurisdictions, where required by local rules. Our total recordable incident rate for such jurisdictions is as follows:
Equity, Diversity and Inclusion
We emphasize our core values of Excellence, People, Integrity, and Compassion (EPIC) in our hiring and human resources practices as well as our customer service. Our corporate culture, focused on providing employees with opportunities, based solely on individual excellence and initiative, was instilled by founders who represented highly diverse skill sets and origins but shared a common commitment. Of our ten founders, seven were born outside the United States, and eight are diverse.
Our future success depends on our ability to retain, attract, and motivate qualified personnel, especially our design and technical personnel, but also our senior management and support personnel, and achieving those objectives requires us to maintain a work environment and culture that values diversity. We operate across eighteen countries and are sensitive to the many cultures and backgrounds constituting our employee base. We acknowledge that we, along with the semiconductor and broader technology industry, can do more to advance gender and racial equality by increasing representation of underrepresented minorities as well as females in leadership and technical positions including engineering and other roles.
Of our approximately 1,844 worldwide employees as of December 31, 2022, the majority of employees were from diverse ethnic backgrounds. While that data reflects in part our substantial presence in Asia, even in North America, 52% of our employees with a rank of vice-president or higher and 73% of our employees generally were of diverse ethnicity or were women, respectively, compared to 39% and approximately two-thirds, respectively in 2021.
As of December 31, 2022, women represented 17% of our total employees, the majority in engineering. We are an engineering-driven company, and we are proud that women have played a substantial role in designing and developing our products notwithstanding the historical under-representation of women in university engineering departments, particularly in electrical engineering. As of December 31, 2022, we employed 193 women in central engineering functions, representing approximately 14% of our total engineers, up from 133 women representing 12% of our engineer base in 2021. We believe female representation among our engineering staff compares favorably within our industry, but we remain committed to finding rewarding career opportunities for women across all functions within MaxLinear as well as to encouraging the engineering programs from which we recruit to increase their emphasis on opportunities for women. In that regard, we are also proud to have on our board of directors Tsu-Jae King Liu, Ph.D., the first female dean of the College of Engineering at the University of California, Berkeley, who is also a member of the National Academy of Engineering and the National Academy of Inventors.
Of our total employee workforce, 17% is represented by Work Councils or collective bargaining agreements in Austria, Germany, and Spain, but all of our employees have freedom of association, or the legal right to join worker organizations, including trade unions, and the right to collective bargaining. The Work Council groups, common to these countries, are comprised of employees elected by the general employee base. We consider our global employee relations to be good. In 2022, our employee voluntary turnover rate was 11%. We host regular global town hall meetings in which all employees are encouraged to submit any question, ahead of or during the meeting, to be addressed by executive and senior management. We also have a formal confidential reporting policy and complaint procedures for employees and others to express concerns about conduct within MaxLinear, which includes confidential hotline reporting available in local languages (https://maxlinear.ethicspoint.com). We are committed to limiting the use of temporary or contract workers to specialized, non-recurring projects or during peak times when permanent employment is scarce, and when we do use contract workers, we make efforts to convert them to permanent employees when they can fulfill open positions. As of December 31, 2022, while all of our employees are considered permanent employees, contractors comprised 18% of our workforce and we are committed to further reducing our use of such contractors. When needed, we conduct responsible workforce restructuring procedures in compliance with the regulations of the jurisdictions in which we operate.
Employees by country. The following table presents our number of emloyees by country:
|Republic of Korea||1||1|
Our human capital resources objectives include, as applicable, attracting and retaining talented and experienced employees, advisors, and consultants. We utilize multiple online search tools, specialized recruiting firms, employee referral programs and university hires to ensure a varied outreach approach for candidates. We aim to increase our hiring and retention of female talent including direct hires or interns from universities. We offer this via a combination of competitive base salary, time-based equity incentives and bonus plans linked to financial performance that are designed to motivate and reward personnel with annual grants of stock-based and cash-based incentive compensation awards to our employees, some of which vest over a period of four years, plus other benefits, in order to increase stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve both our short and long-term objectives. We offer competitive benefits tailored to local markets and laws and designed to support employee health, welfare and retirement; examples of such benefits may include hybrid work schedules with one flexible day allowing all employees globally to work from home; paid time off; 401(k), pension or other retirement plans; employee leave or part-time arrangements to support well-being of employees and their dependents; sabbaticals; bereavement leave; employee stock purchase plan; basic and voluntary life, disability and supplemental insurance; medical, dental and vision insurance; health savings and flexible spending accounts; relocation assistance; and employee assistance programs. Our global training and development program includes internal on-the-job training and we have launched a pilot training program which includes seminars, podcasts and recommended learnings under which we have received tremendous employee participation. Our corporate training program, which is mandatory, covers training on discrimination-free workplace, as well as our code of ethics and employee conduct, insider trading policy, global export controls and economic sanctions policy, global anti-bribery and anti-corruption policy, and anti-trust and competition law.
We have recently embedded within our corporate governance principles, which are available on our website, our commitment to corporate responsibility initiatives. Our Nominating and Corporate Governance Committee has assumed responsibility in its charter for overseeing our ESG initiatives, and we look forward to continued communication to and engagement with stockholders on these matters.
Our business and operations around the world are subject to government regulation at the national, state, provincial, or local level addressing, among other matters, applicable environmental laws; health and safety laws and regulations adopted by government agencies such as the Occupational Safety and Health Administration; laws relating to export controls and economic sanctions; and the rules of industrial standards bodies such as the International Standards Organization and governmental agencies such as the Federal Trade Commission.
We believe that our properties and operations comply in all material respects with applicable laws protecting the environment and worker health and safety. We do not manufacture our own products but do maintain laboratory space at certain of our facilities to facilitate the development, evaluation, and testing of our products. These laboratories may maintain quantities of hazardous materials. While we believe we are in material compliance with applicable law concerning the safeguarding of these materials and with respect to other matters relating to health, safety, and the environment, the risk of liability relating to hazardous conditions or materials cannot be eliminated completely. To date, we have not incurred significant expenditures relating to environmental compliance at our facilities nor have we experienced any material issues relating to employee health and safety. We cannot provide assurances, however, that issues will not arise in the future or that applicable law will not require us to incur significant compliance expenditures.
In addition to environmental laws, our business is subject to various rules and regulations and other orders relating to export and/or import controls.
Contributing to Community and Employee Well-Being
We encourage our employees to contribute to local communities. In 2022, MaxLinear, its directors and employees have raised in excess of $100,000 in donations and goods to charitable organizations. In March 2022, MaxLinear launched a relief effort contribution matching program which matches 100% of employee contributions to three organizations providing humanitarian relief to refugees of the conflict in Ukraine: Doctors without Borders, World Kitchen and Save the Children. Annualy in December, we organize a donation, toys and goods drive to stop the cycle of child abuse and help at-risk youth in the community benefiting Olive Crest, a U.S. child abuse prevention and treatment charitable organization. More recently, in February 2023, MaxLinear launched another relief effort contribution matching program which matches 100% of employee contributions to four organizations providing humanitarian relief to victims of the 7.8 magnitude earthquake in Turkey and Northern Syria providing shelter, food, water and medicine: Save the Children, Red Cross, Global Giving and United Nations International Children’s Emergency Fund.
Also in 2022, we have launched efforts and organized events to encourage our employees to participate in volunteerism to promote diversity, equity, and inclusion in the community, environmental sustainability, and enhance employee well-being. In September 2022, our U.S. offices participated in national clean up day. Annually in April, May and September, we sponsor a team of employees to run in 5K races in southern California and in Canada. Our international offices have hosted an international day of women to promote the study of science, technology, engineering, and math by young women, participated in mentoring and investing in underserved communities, humanitarian aid creating aid packages and food kits, and environmental clean up. We participate in the Singapore Workplace Outreach Wellness Programme and other fitness and wellness initiatives in our other offices. We also launched a global employee recognition program which allows employees and managers to nominate employees, including those in other departments, for monetary awards and corporate recognition. These programs and efforts are organized locally and monitored and evaluated by our human resources department.
We apply for research and other grants from local governments in the jurisdictions in which we operate to enhance our research and development efforts worldwide. The following are grants we have applied for and began receiving grant monies in the last three years; we currently expect to receive all such grants:
|Tax Authority Austria||In progress||EUR 1,632,943||EUR 1,099,050|
|Singapore Economic Development Board||SGD 3,675,818||SGD 2,098,641||SGD 1,468,917|
Political Contributions and Lobbying
MaxLinear has not made any political contributions and does not currently engage in lobbying either directly or through other channels. Our code of ethics and employee conduct prohibits employees that participate in political activities from indicating the Company's endorsement of such activities. We have no history of political contributions, including support of funding political campaigns or political action committees, or to specific politicians or political parties, in any country or jurisdiction.
Cautionary Note Concerning Forward-Looking Statements
This page contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among others, statements regarding the capability of our technology and products, statements concerning measures to reduce greenhouse gas emissions and the Company’s environmental impact, use of a socially responsible and ethically sourced supply chain, plans regarding workplace safety, human capital resources objectives, ESG initiatives, government grants applications and lobbying. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from any future results expressed or implied by the forward-looking statements and our future financial performance and operating results forecasts generally. Forward-looking statements are based on management’s current, preliminary expectations and are subject to various risks and uncertainties. In particular, our future operating results are substantially dependent on our assumptions about market trends and conditions. Additional risks and uncertainties affecting our business, future operating results and financial condition include, without limitation, risks relating to our proposed merger with Silicon Motion and the risks related to increased indebtedness; the effect of intense and increasing competition; impacts of a global economic downturn and high inflation; the cyclical nature of the semiconductor industry; the political and economic conditions of the countries in which we conduct business and other factors related to our international operations; increased tariffs or imposition of other trade barriers; our ability to obtain or retain government authorization to export certain of our products or technology; risks related to international geopolitical conflicts; risks related to the loss of, or a significant reduction in orders from major customers; a decrease in the average selling prices of our products; failure to penetrate new applications and markets; development delays and consolidation trends in our industry; inability to make substantial research and development investments; a significant variance in our operating results and impact on volatility in our stock price, and our ability to sustain our current level of revenue, including the impact of excess inventory in the channel on our customers’ expected demand for certain of our products, and/or manage future growth effectively; claims of intellectual property infringement; our ability to protect our intellectual property; and a failure to manage our relationships with, or negative impacts from, third parties.
In addition to these risks and uncertainties, investors should review the risks and uncertainties contained in our filings with the Securities and Exchange Commission (SEC), including our latest Annual Report on Form 10-K, and our Current Reports on Form 8-K, as well as the information set forth under the caption "Risk Factors" in MaxLinear's latest Quarterly Reports on Form 10-Q filed with the SEC. All forward-looking statements are based on the estimates, projections and assumptions of management as of May 9, 2023, and MaxLinear is under no obligation (and expressly disclaims any such obligation) to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.